Dentsu Acquires McGarryBowen

Japanese Ad Company Deepens Its Roots in U.S. With Deal for Mad Ave Indie

NEW YORK (AdAge.com) -- The U.S. arm of Japanese ad giant Dentsu has inked a deal to buy McGarryBowen, a 6-year-old Madison Avenue indie shop long rumored to be on the block.

Terms of of the deal were not disclosed. Representatives for Dentsu Holdings USA and McGarryBowen either declined to comment or could not be reached for further comment before press time. One executive familiar with the matter noted that the management team at McGarryBowen will remain intact, and the agency will become a wholly owned unit of Dentsu Holdings, akin to DentsuNext, Dentsu Latin America or Dentsu Canada.

McGarryBowen, which posted $51 million in revenue last year, has some 235 employees between its New York headquarters and Chicago outpost. The agency also has a digital arm, Continuity, led by McGarryBowen CEO John McGarry's son.

Launched in 2002, the shop was the brainchild of Mr. McGarry, Gordon Bowen and Stewart Owen; the latter two executives serve as chief creative officer and chief strategic officer, respectively.

Talks between McGarryBowen and Tokyo-based Dentsu Inc. began this summer, according to an executive familiar with the matter.

For the Japanese giant, the move makes strategic sense, as the firm attempts to globalize and establish a deeper footprint on U.S. soil.

Among the signs of Dentsu's seriousness about making the U.S. ad market a priority is how swiftly Tim Andree, CEO of Dentsu America, has been shuttled through the ranks. Mr. Andree, an American, is first non-Japanese individual to be appointed as an executive officer in Dentsu's more-than-century-old existence. (Separately, Mr. Andree has again been promoted; he adds to his title the role of president-CEO of Dentsu Holdings USA).

Mr. McGarry, a veteran of WPP Group's Young & Rubicam, is renowned in ad circles for his knack for forging long-lasting client relationships. The deal also gives Dentsu the opportunity to add a number of venerable new clients to its roster, including Kraft, JP Morgan, Disney and the Wall Street Journal.

For McGarryBowen, meanwhile, being acquired by a large global player gives the agency an opening into new markets. Tokyo-based Dentsu ranked as the world's largest ad agency with more than $2 billion in revenue last year, according to Advertising Age's Datacenter.

"What we love about Dentsu is that they share that same overwhelming desire to help their clients," Mr. McGarry said in a statement. "More and more, our clients demand global capabilities and this will allow us to continue to serve our clients better."

In a statement, Mr. Andree pointed to Dentsu's "intention to grow globally, to add diverse talent and skills to the network, and to extend the strength and capabilities of Dentsu outside of Japan. Today's acquisition is powerful evidence of Dentsu making good on that promise to our clients, and is a real coup for the growing Dentsu family."